Insider Advantage: Three Reasons Former Underwriters Make Better Brokers

By Craig M. Santa Maria

I’m sure you’ve heard the old proverb: “Walk a mile in another man’s shoes before judging him.” It’s a good lesson in empathy and tolerance and certainly helps prevent a lot of misunderstanding and conflict.

The basic tenet that shared underwriterexperiences create greater understanding is relevant in all types of personal interactions, even purchasing insurance coverage for your business. In my experience, a broker who has “walked in the shoes of” an underwriter has a significant advantage in putting together the most appropriate coverage solution with the most
favorable terms.

In my eight years as an underwriter and 14 years as a risk adviser and broker, I’ve found there are three key advantages underwriters-turned-brokers have when negotiating on your behalf:

  • They present your business more favorably – The job of an underwriter is to measure risk exposure and determine the premium that must be charged to insure that risk. With intimate knowledge of how business risk is measured, former underwriters are best able to improve the underwriting process in a way that addresses concerns and makes your risk profile most attractive.
  • They use their experience and knowledge to suggest terms and pricing – Underwriting experience enables a broker to proactively develop a cost and coverage model that has a high probability of success.
  • They use time to your advantage – The underwriting process can require considerable time and resources. Underwriters are stretched for time and capacity, so your company must compete for adequate attention. Many times the process is mismanaged, resulting in reflexive rejections or last minute offerings, leaving you little time to review and negotiate. A seasoned broker with an underwriting background will have strong, trusted relationships with carrier decision makers. This will eliminate inefficient uses of time, good will, and resources, resulting in a better negotiation and more agreeable terms.

When the time comes to renew your existing coverage or make changes to meet the needs of your business, talk with a broker who has solid underwriting experience. I think you will clearly see a positive difference in their ability to meet your risk insurance needs.

Craig Santa Maria is President and COO of Santa Maria & Company (SMC), a risk management consultant and commercial insurance broker in the San Francisco Bay area with deep expertise helping companies protect what is most important to them: their assets, their employees, and their futures. Contact SMC at 925-956-7600 or online at www.smcrisk.com.

 Santa Maria & Company:  Experts in Risk Management and Providing Peace of Mind

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Know Your Risks When Serving Alcohol at Company Events

By Craig M. Santa Maria

With Halloween behind us and shorter, colder days ahead, it’s time to begin planning for the festivities of the holiday season. For many companies, that means hosting an employee holiday party. Whether it’s snacks and drinks in the office or a gala dinner at a nice restaurant, this holiday tradition can expose your business to significant risk.

alcoholWhile alcohol is a part of American culture, especially during the holidays, over consumption can precipitate illegal or injurious behavior between guests, such as sexual harassment, and injuries or deaths resulting from drunken driving accidents. And if your company sponsored the event at which the offender was served alcohol, you could be held liable for damages.

James Wu, an employment attorney with Wu Castillo, P.C., in San Francisco and Walnut Creek, CA, notes that a California appellate court recently found an employer liable for the actions of an employee who became intoxicated during a company-sponsored holiday party, drove home safely, but later was involved in a fatal automobile accident when driving a co-worker home. “The appellate court overruled the trial court that originally determined the company was not liable, agreeing with the company’s contention that the person was able to drive home safely after the party,” says Wu. “However, the victim’s family appealed and the appellate court agreed that the man’s intoxication due to the alcohol consumed at the work party was a causal factor, so the company could be held liable for the fatality.”

This risk is not exclusive to holiday events. A few years ago, a company provided alcohol to employees during a company picnic, after which one clearly intoxicated employee was severely injured in an automobile accident. Others at the picnic attempted to prevent the individual from driving, but were unsuccessful. While the company was not held liable for the employee’s insurance claim, it did incur a significant cost in settling a civil lawsuit.

What are your risks?

As a business owner, you should understand your legal risks. While these laws differ from state to state, generally employers who provide alcohol at company-sponsored events are expected to exercise reasonable care to avoid serving minors and to prevent injuries or improper behavior by intoxicated guests.

Some employers avoid this risk by serving only non-alcoholic beverages at their employee events. But if you do choose to serve alcohol, Wu recommends the following things you can do to protect yourself and your guests:

  • Make the event voluntary and purely social. Avoid any business related activities, such as award ceremonies or business-focused speeches.
  • Ensure guests understand that rules governing employee conduct apply also at the event. These rules should be detailed in your employee handbook.
  • Limit the number of drinks served to guests by using drink tickets or a similar system
  • Offer a wide selection of equally attractive non-alcoholic drinks and plenty of food
  • Plan a program of activities to minimize the focus on drinking
  • Consider hiring a professional bartender to run the bar or host the event at a bar or restaurant with a liquor license. These professionals are typically trained to identify those who are intoxicated and limit consumption. They also incur some of the liability if an issue does arise, so be sure they are properly trained and insured.
  • Close the bar at least an hour before the party ends
  • Have plans in place to provide transportation home for intoxicated guests and/or hotel discounts/arrangements.
  • Do not encourage or organize any “after-parties” where guests might continue to drink after the company event has ended

What if something bad still happens?

If, despite your best efforts, a liability claim does arise from an incident caused by an intoxicated guest, your property and casualty insurance coverage will likely help defray the financial costs. Because policies, laws and circumstances can vary widely, it is important that you talk with your insurance broker about your risks and coverage before your event to be certain you are protected.

 

Craig Santa Maria is President and COO of Santa Maria & Company (SMC), a risk management consultant and commercial insurance broker in the San Francisco Bay area with deep expertise helping companies protect what is most important to them: their assets, their employees, and their futures. Contact SMC at 925-956-7600 or online at www.smcrisk.com.

Santa Maria & Company:  Experts in Risk Management and Providing Peace of Mind